“While we received significant interest from potential investors, the continued market and economic volatility are not optimal conditions for an IPO,” John Woolard, BrightSource’s chief executive, said in a statement.

BrightSource’s IPO had been seen as a test of Big Solar’s interest to investors but the solar market has been in upheaval as Germany and Spain have moved to ratchet back subsidies while the future of incentives for renewable energy in the U.S. has been caught up in presidential election-year politics.

As solar panel prices have plummeted, Chinese photovoltaic module makers grabbed a large share of the U.S. market and group of solar panel manufacturers filed an unfair trade complaint against China. With a 75% fall in solar panel prices over the past three years, utilities in California, the largest U.S. solar market, have favored photovoltaic projects over the solar thermal facilities built by companies like BrightSource. Falling natural gas prices have also made it harder for solar to compete for utility contracts. Against that backdrop, BrightSource’s solar thermal competitors Solar Millennium of Germany and U.S. startup Stirling Energy Systems filed for bankruptcy in recent months.

"Solar thermal electricity is a power business and it moves on a similar time scale: three to five years," Nathaniel Bullard, a veteran solar analyst at Bloomberg New Energy Finance, wrote in an e-mail. "It is now competing with two things: PV, which is a semiconductor business and moves in months; and combined cycle natural gas turbines, which are drawing upon surging supply of fuel at very low cost."

BrightSource Energy, which is well capitalized and the recipient of a $1.6 billion federal loan guarantee, seemed a likely candidate to be one of the few solar thermal startups left standing.

Unlike photovoltaic developers that build massive arrays of solar panels like those found on residential rooftops to directly convert sunlight into electricity, BrightSource uses mirrors called heliostats to focus the sun on a tower topped by a water-filled boiler. The heat creates steam that is used to drive an electricity-generating turbine. The company’s first project, Ivanpah, is under construction in the Mojave Desert in California 45 miles southeast of Las Vegas and BrightSource has signed contracts with utilities to deliver 2,600 megawatts of electricity from other projects to be constructed.

"It has even filed to build new projects, which none of its competitors have done," said Bullard. "There is potential for more strategic investment or a large asset sale to a credit-worthy investor."